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IMO Pushing To Reduce Emissions for Vessels Globally
There is a growing effort in the maritime industry to reduce emissions that are produced by cargo vessels. This will put pressure on the price and supply of diesel fuel globally. In the next few years the maritime industry is positioning itself to switch to diesel from what is known as bunker fuel. This crude fuel has been used for years because it is relatively cheap compared to other more refined fuels. The vessels are effectively burning the leftovers from the crude oil once the gasoline, diesel, etc.… have been refined from it.
In 2016 the United Nations’ International Maritime Organization (IMO) directed the maritime industry to significantly reduce sulfur emissions from vessels. The IMO stated that maritime industry is causing “major risks to both the environment and human health.” The allowable sulfur content for marine fuel must be reduced from 3.5% to 0.5% by 2020. Based on one survey of shipping companies from last year, 74% stated that they would switch to diesel fuel. The others plan to either install equipment to reduce sulfur emissions or switch to liquified natural gas.
The shipping industry uses millions of barrels of fuel each day, this change will most certainly drive up the price of oil and put a great amount of pressure on refineries to keep up with the increased demand for more refined fuels. Also, considering that increased demand for diesel fuel in the trucking industry has been driving prices up in recent months, one can expect this trend to continue even more so in the future.
Contributer: John Law
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References:
Ronan, D. (2018, May 08). Cargo Ships May Switch to Diesel Fuel by 2020. Retrieved May 14, 2018, from http://www.ttnews.com/articles/cargo-ships-may-switch-diesel-fuel-2020